Group Challenges IRS's Use of Political Activities Test to Intrude on Charities' First Amendment Rights

The James Madison Center for Free Speech has filed two federal lawsuits claiming that the IRS has stifled the legitimate speech activities of many non-profit organizations.  From the press release:

For decades the IRS has applied an "all the facts and circumstances" test to the grass roots lobbying, issue advocacy and voter education activity of non-profits to determine if the non-profit has actually engaged in prohibited political activity. Furthermore, this vague IRS test has been exploited by some liberal groups to threaten and harass churches and other non-profits, causing many of them to be fearful of IRS retribution if they discussed moral or public policy issues. Non-profits have even shied away from legitimate grass roots lobbying activity in fear that it will be considered political intervention. As a result, the legitimate speech activities of many non-profits have been chilled and their free speech rights infringed.

In Catholic Answers and Karl Keating vs. USA, the IRS determined that two "E-letters" posted in 2004 by the President of Catholic Answers, Karl Keating, on his blog on the Catholic Answers website arguing that John Kerry should not receive Holy Communion, because of his pro-abortion position, were "political expenditures" that might influence the 2004 presidential election. The IRS assessed a tax on Catholic Answers, a 501(c)(3) charity, for these blog entries and required that Keating reimburse Catholic Answers $900 for the expenditures incurred for these E-letters. Catholic Answers is demanding that the courts find that a discussion by a Catholic group about who should receive Holy Communion is not properly considered "political intervention," allowing them to reimburse Keating his $900.

In Christian Coalition of Florida vs. USA, the Christian Coalition of Florida (CC-FL) was denied its 501(c)(4) status by the IRS because the IRS claimed that its newsletters, voter guides, and legislative scorecards constituted political intervention and that these activities meant that CC-FL’s "primary activity" was political intervention. CC-FL claims, however, that their newsletters, voter guides and legislative scorecards are educational in that they provide members with information about candidates and legislators on a variety of issues and do not expressly advocate the election or defeat of any candidate. Furthermore, CC-FL argues that these activities, even if considered political intervention, were not extensive enough to be the "primary activity" of CC-FL

In both cases, the Madison Center is also claiming that the IRS rules and regulations are vague and overbroad and, as a result, chill the First Amendment free speech rights of non-profits. The suits ask that the IRS’s rules and regulations on "political intervention," and its "facts and circumstances" test, be struck down or narrowly construed to only encompass speech which expressly advocates the election or defeat of a clearly identified candidate.